Does a Subsequent Paragraph IV Filer Have a Legally Cognizable Interest in When a First-Filer’s 180-Day Exclusivity Period Begins for DJ Jurisdiction Purposes?

October 7, 2010

By Kurt R. Karst –      

The U.S. Court of Appeals for the Federal Circuit answered “Yes” to this question in an October 6th decision in Teva v. Eisai (2009-1593) that could pave the way for generic versions of Eisai, Inc.s’ ARICEPT (donepezil HCl) Tablets sooner than expected if the first-filer in this pre-Medicare Modernization Act case, Ranbaxy, does not otherwise trigger its 180-day exclusivity (which might not happen through commercial marketing because of the company’s manufacturing problems), and for which Ranbaxy qualified as a result of the company’s Paragraph IV certification to four Orange Book-listed patents covering ARICEPT – U.S. Patent Nos. 5,985,864 (“the ’864 patent”); 6,140,321 (“the ’321 patent”); 6,245,911 (“the ’911 patent”), and 6,372,760 (“the ’760 patent”) (collectively the “DJ Patents”).  The Federal Circuit’s decision reverses a September 9, 2009 decision from the U.S. District Court for the District of New Jersey in which the court granted Eisai’s Motion to Dismiss for Lack of Subject Matter Jurisdiction Teva’s declaratory judgment action on the DJ Patents.  Eisai argued, and the district court agreed, relying in part on a preliminary injunction entered against Teva and the company’s Gate Pharmaceuticals subsidiary in a separate and ongoing patent infringement action regarding a fifth Orange Book-listed patent on ARICEPT – U.S. Patent No. 4,895,841 (“the ’841 patent”) expiring on November 25, 2010 – that Teva failed to establish the existence of an Article III controversy for declaratory judgment jurisdiction.  Teva appealed the decision arguing that the case should proceed, and the Federal Circuit agreed applying a 2008 decision in Caraco Pharmaceutical Laboratories, Ltd. v. Forest Laboratories, Inc., 527 F.3d 1278 (Fed. Cir. 2008).

In the last couple of years, the Federal Circuit has addressed the proper jurisdictional scope of the “case or controversy” requirement under Article III of the U.S. Constitution for a court to have jurisdiction in ANDA Hatch-Waxman declaratory judgment actions where a patent covering the Reference Listed Drug is listed in the Orange Book; specifically, in Caraco and another 2008 decision in Janssen Pharmaceutica, N.V. v. Apotex, Inc., 540 F.3d 1353 (Fed. Cir. 2008).  These decisions came in the wake of the U.S. Supreme Court’s January 2007 decision in MedImmune, Inc. v. Genentech, Inc., 549 U.S. 118 (2007), in which the Court ruled that a dispute must be “definite and concrete” and “real and substantial” to support the exercise of a district court’s subject matter jurisdiction, and the Federal Circuit’s March 2007 decision in Teva Pharms. USA v. Novartis Pharms. Corp., 482 F.3d 1330 (Fed. Cir. 2007), in which the Court, consistent with the Supreme Court’s MedImmune decision, rejected the “reasonable apprehension of imminent suit” test the Federal Circuit had followed for several years, and instead adopted an “all the circumstances” standard for determining when a justiciable controversy for declaratory judgment actions exists. 

In one “bookend” Hatch-Waxman declaratory judgment decision – Caraco, concerning LEXAPRO (escitalopram oxalate) – the Federal Circuit held that an ANDA applicant’s declaratory judgment action for non-infringement met the Article III “case or controversy” requirement notwithstanding that the patentee had granted the generic applicant a covenant not to sue.  In that case, the Federal Circuit determined that “Forest’s covenant not to sue did not eliminate the controversy between the parties.”  In the other “bookend” decision – Janssen, concerning RISPERDAL (risperidone) Oral Solution – the Federal Circuit dismissed a declaratory judgment action for non-infringement notwithstanding a covenant not to sue, because the “alleged harm of indefinite delay of [ANDA] approval was too speculative to create an actual controversy to warrant the issuance of a declaratory judgment,” and therefore, did not meet the Article III requirement.  Although the factual scenarios presented to the Federal Circuit in Caraco and Janssen were very similar, the point of difference that led the Federal Circuit to rule against declaratory judgment jurisdiction in Janssen was that the ANDA applicant, Apotex, stipulated to the validity, infringement, and enforceability of one Orange Book-listed patent covering RISPERDAL (that was not the subject of the declaratory judgment action).  As a result, according to the Federal Circuit, the potential harm to Apotex changed, in that Apotex eliminated any possibility of going to market until the expiration of that patent even if the company could claim victory in its declaratory judgment action concerning two other Orange Book-listed patents.  In an “intermediate” case – Dey L.P. and Dey Inc. v. Sepracor Inc., concerning Dey’s ANDAs for generic versions of Sepracor’s XOPENEX (levalbuterol HCl) – the U.S. District Court for the District of Delaware ruled in January 2009 that Dey’s declaratory judgment action presented a justiciable Article III controversy.

In the instant case, both Teva and Gate amended previously-submitted ANDAs with Paragraph IV certifications to each of the five Orange Book-listed patents on ARICEPT.  Ranbaxy’s ANDA contains Paragraph IV certifications to the DJ Patents, but a Paragraph III certification to the ’841 patent.  This set up the possibility for shared 180-day exclusivity in a non-mutually-blocking Paragraph IV certification circumstance, whereby Teva would qualify for exclusivity with respect to the ’841 patent and Ranbaxy would qualify for exclusivity with respect to the DJ Patents.  And, indeed, FDA approved Teva’s ANDA No. 77-344 in April 2008 after expiration of a 30-month stay, presumably recognizing shared 180-day exclusivity.  In September 2010, however, FDA converted Teva’s final ANDA approval to a tentative approval because, among other things discussed in a September 17, 2010 Letter Decision publicly disclosed in the Federal Circuit’s docket (and that effectively responds to a recent Eisai citizen petition), the Agency decided not to apply its shared exclusivity policy in this case.

Although Eisai filed a patent infringement suit against Teva with respect to the ’841 patent, Eisai did not sue on the DJ Patents.  In May 2008, Teva filed an action for declaratory judgment on the DJ Patents – two of which (the ’864 and ’321 patents) were subject to statutory disclaimers, and the other two of which (the ’911 and ’760 patents) are the subject of a covenant-not-to-sue between Eisai and Teva.  Nevertheless, the DJ Patents remain listed in the Orange Book.  This is an important fact for the Federal Circuit’s decision, because although the “facts were slightly different, Janssen reaffirms Caraco’s holding that the injury-in-fact must stem from the actions of the company that listed the patents in the Orange Book, not the inherent framework of the Hatch-Waxman Act.”

In applying the CaracoJanssen decisions, the Federal Circuit ruled that Teva v. Eisai is more akin to Caraco:

As we explained in Caraco, the generic drug company’s injury (i.e., exclusion from the market) is fairly traceable to the defendant’s actions because “but-for” the defendant’s decision to list a patent in the Orange Book, FDA approval of the generic drug company’s ANDA would not have been independently delayed by that patent.  527 F.3d at 1292; see 21 U.S.C. § 355(j)(5)(B)(iv).  When an Orange Book listing creates an “independent barrier” to entering the marketplace that cannot be overcome with-out a court judgment that the listed patent is invalid or not infringed – as for Paragraph IV filers – the company manufacturing the generic drug has been deprived of an economic opportunity to compete.  Id. at 1293; see also 21 U.S.C. § 355(j)(5)(B)(4).  A declaratory judgment redresses this alleged injury because it eliminates the potential for the corresponding listed patent to exclude the generic drug from the market. . . .

Here, as in Caraco, a favorable judgment “would eliminate the potential for the [DJ patents] to exclude [Teva] from the drug market.”  527 F.3d at 1293.  Unlike the generic drug company in Janssen, Teva has not stipulated to the validity, infringement, or enforceability of any other patent listed in the Orange Book for donepezil.  540 F.3d at 1360.  Nor is Teva subject to any final judgment regarding an Orange Book patent for donepezil that would prevent Teva from selling products covered by the Gate ANDA. Given the absence of such factors, Caraco controls. 

The Hatch-Waxman world is already buzzing about the decision, with questions posted in the Linked-In Hatch-Waxman ANDA Litigation Forum, such as “So what’s the takeaway here?  There’s DJ jurisdiction if a later-filer is blocked, not by the first-filer’s 180-day exclusivity, but instead by the listing of the patents in the Orange Book?”

Interestingly, in another declaratory judgment action concerning generic ARICEPT filed in the U.S. District Court for the Middle District of North Carolina by a subsequent ANDA filer, Apotex, in an effort to “unpark” 180-day exclusivity, the court applied Janssen and recently  ruled (see our previous post here) that “Apotex has not presented a justiciable Article III controversy in the present case, and that even if it had, the Court within its discretion would decline to exercise jurisdiction over this claim.”  Apotex has appealed that decision to the Federal Circuit – Apotex v. Eisai (2010-1559).


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Categories: Hatch-Waxman